The United States and South Korea have reached ‘an agreement on the details of the tariff negotiations’, which will bring US tariffs on automobiles to 15% in exchange for South Korea’s $350-billion investments in the United States, according to a top aide of South Korean President Lee Jae Myung.
The United States and South Korea have reached “an agreement on the details of the tariff negotiations”, a top aide of South Korean President Lee Jae Myung has said.
The United Stats and South Korea have agreed to “cutting tariffs on automobiles and auto parts to 15 per cent”, down from 25 per cent, Kim Yong-beom, the Chief Presidential Secretary for Policy of Lee, has told reporters on the sidelines of Apec Summit.
In exchange of reduced tariffs, South Korea will invest $350 billion in the United States, which will include $200 billion in cash investment and $150 billion in shipbuilding cooperation, Kim further said.
It was not immediately clear if Kim referred to an understanding reached between Trump and Lee or a formal deal signed by the two leaders.
Originally, Trump had slapped 25 per cent ‘reciprocal tariff’ on South Korea. Later, the two sides reached an understanding to bring that down to 15 per cent. But an agreement to formalise the understanding was never signed.
Moreover, South Korea continued to face higher tariffs of 25 per cent on automobiles and 50 per cent on steel and aluminium.
Observers of US-Korea relations had previously said that $350 billion was a huge figure and Lee would want to lower that.
“Lee’s position is clear — that he can’t accept an amount as big as $350 billion. He has to try to get that down to $200 or $250 billion, but even that would be too much,” Shin Se-don, an honorary professor of economics at Sookmyung University in Seoul, told Nikkei Asia.
Shin further said, “The key factor will be whether Trump is willing to step back from his stance.”
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